Cryptocurrency Terminologies we should be familiar with: 2nd Edition

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Greetings Everyone,
Welcome to my blog, today we would be continuing the crypto lesson from a month or two ago where we gave simple and clear meanings to some commonly used cryptocurrency Terminologies which some people might have heard of but they might not have known what they are about. Today we would be stretching the vocabulary a bit and covering some more words and I would try to make it as clear as possible so let's jump right in.

Custodial & Non-custodial Wallet

A custodial crypto wallet is a wallet where we store our cryptocurrencies which the private keys used to access the stored currencies are placed in the custody of a custodian/ third party/ external body. For example your Binance wallet is a custodial wallet.

A Non-custodial Wallet is a crypto wallet where we the owners of the wallet are the sole owners and holders of our private keys. Users of Non-custodial Wallets are responsible for any compromises made in their wallet because they are to keep their keys safe and make the right decisions.

Bitcoin Halving

It seems halving is most applicable when it comes to Bitcoin. When miners mine Bitcoin blocks after producing 210,000 blocks mined, the block Rewards given to the miners are cut in half to reduce the amount of Bitcoin in circulation. This takes around 4 years to happen.

Proof-of-Brain

This is a blockchain token mechanism that is aimed at rewarding users for their hardwork and use of their brain in dropping meaningful and quality content. I first found out about this on the Steem blockchain. It has gone a long way in helping alot of content creators by rewarding them for their creativity.

FOMO

It's is an acronym for Fear of Missing Out. This term is mostly used in a market where the coin's value starts rising sharply and crypto newbies who have the Fear that if they don't buy they would miss out and they end up buying. It usually ends up in bad decisions and regrettable mistakes. Imagine you see steem jump to $0.8 many people would jump to buy but it ends up dipping to $0.4 hence buying at that moment was a bad decision.

Whitelist

The whitelist here is referring to in the world of NFTs. When they whitelist someone, it means that person has exclusive rights to mint NFTs for a given period. On discord communities today where people struggle for NFTs, the colour of your name in the group determines your status. If you get whitelisted, each community has a specific colour which your name tag would change to to signify it.

ICO

This is an acronym for Initial Coin Offering. This is a situation where a company seeking to raise money to launch a cryptocurrency, take it to the public for them to buy so they can raise funds it. The investors or buyers are given the new cryptocurrency which might even have some utility in the company like being able to buy some of its goods and services. It's simply the selling of new cryptocurrencies to the public inorder to raise funds.

DEx

This is an acronym for Decentralized exchange. As we all know an exchange is a site or app where one can trade crypto currencies for other currencies or crypto currencies. A Decentralized exchange on the other hand are sites where one can trade cryptocurrencies directly with the buyer or seller without third party involvement or control. They are usually opposed to centralized exchanges which are controlled by a third party.

Cold Wallet

This is simply a physical and offline hardware storage unit where ones crypto currencies or keys can stored completely offline and free from online hackers and viruses. A flash drive or hard drive can also serve as a cold wallet. Since they are completely offline, they are one of the safest ways people store their cryptocurrencies in this modern era.

HODL

This is a crypto slang which means Hold On for Dear Life. This is used by investors and crypto enthusiasts when they are referring to holding a coin for long term or for a certain period of time. For example steem used to be $0.7 and then it dropped to $0.4 that would be a bad time to sell as it's value is low so you would HODL until the price is higher and more favourable.

dApp

This is a short form for the term Decentralized Application. People might think that all apps are centralized but decentralized has come to change the narratives. dApps are one source applications that run on a blockchain network hence they are not run by one computer but by a large network of interconnected computers. Decentralized applications are better because unlike in a centralized situation where the central computer is faulty, the whole app and the users would have to halt until it's fixed but a dApp is immune to this as a fault in one system wouldn't affect the whole app.

FUD

This is an acronym for Fear, Uncertainty and Doubt. This is used when there is a perssimistic perception of the coin or the market. This can be caused when there is bad news or rumors going on about the coin. For example, you are holding a large amount of LUNA and rumors start going around that there would soon be a rug pull, FUD kicks in and you would end up selling off all your LUNA.

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Conclusion

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I believe the use of these terms would show how versed we are in the crypto verse and would be more professional when interacting with your fellow cryptocurrency investor. I also hope I have been able to teach a thing or two to those who might not have known.

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Other Related Topics

Cryptocurrency Terminologies we should be familiar with: 1st Edition

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